Vodafone Group returns to profit in FY21 despite lower revenues

18 May 2021

Vodafone Group has published its financial results for the year ended 31 March 2021 (FY21), reporting what it called a ‘resilient performance’. For the twelve-month period under review, the company generated a total turnover of EUR43.809 billion (USD53.2 billion), down 2.6% year-on-year from the EUR44.974 billion it recorded in FY20. According to the UK-based telecoms giant, the decline in group revenue was attributable to the effects of the COVID-19 pandemic on roaming and visitor revenue, as well as foreign exchange movements, with these factors wiping out ‘good underlying momentum and the benefit from the acquisition of Liberty Global’s assets’. Group service revenue totalled EUR37.141 billion in FY 2021, meanwhile, broadly flat in organic terms.

With regards to other key financial metrics, the carrier reported an adjusted EBITDA of EUR14.386 billion for FY21, representing a 1.2% organic decline, with the company noting that the drop in turnover had been partially offset by strong cost control. Operating profit increased by 24.3% y-o-y though, with Vodafone Group stating that it had recognised lower gains on disposals and no impairment losses, while it also highlighted the fact it no longer recognised its share of losses related to India’s Vodafone Idea, following the write down of the asset to nil in FY20. On an underlying basis, the group said its performance was broadly stable as lower adjusted EBITDA was partially offset by lower restructuring costs, depreciation and amortisation, and a higher share of profits from associates and joint ventures. Meanwhile, Vodafone Group reported a profit of EUR500 million for FY21, a marked turnaround from the EUR500 million loss it reported for the previous fiscal year, driven by higher operating profit and ‘the recognition of mark-to-market gains’, partially offset by higher income tax expense – primarily due to a noncash charge of EUR2.8 billion following a decrease in the carrying value of deferred tax assets.

In terms of operational highlights, Vodafone Group reported a mobile subscriber base which totalled 269.79 million as of 31 March 2021, up from 266.63 million a year earlier. Fixed broadband access also continued on an upward trend, reaching 24.51 million at the end of FY21, up from 23.52 million at the end of March 2020, while fixed line voice customer numbers increased 1.3% y-o-y, to 20.19 million. Pay TV subscriber numbers increased to 18.35 million, meanwhile, up from 18.28 million.

Commenting on the company’s performance, Vodafone Group CEO Nick Read said: ‘I am pleased that we achieved full year results in line with our guidance and we exited the year with accelerating service revenue growth across the business, with a particularly good performance in our largest market, Germany.’

United Kingdom, Vodafone Group